1. Field of the Invention
The present invention relates to a commercial transaction system and method capable of processing combined credit and debit card transactions and, more particularly, to a system and method for carrying out a combined credit and debit card transaction where, to the user and/or merchant, the combined credit and debit card appears to be a standard credit card.
2. Related Art
U.S. Pat. No. 5,557,516 to Hogan shows a commercial transaction system in which a system user employs a card device to interact with sales or transaction terminals to conduct cashless transactions. The system is designed for purchases of items or transactions of relatively small monetary value, where purchases are generally unattended by salespersons. The amount of the transaction is deducted from the balance on the card device. In accordance with that system, when the existing balance associated with the card does not cover the price of the transaction, the system provides an automatic renewal feature which automatically increases the balance of the card device by a predetermined amount. Each time the balance is increased by an automatic renewal, the card issuing bank bills the card user for increments of the predetermined amount.
The Hogan system is disadvantageous for several reasons. In particular, the system requires the user to limit his or her purchases to relatively small monetary transactions. Further, the card device may not be accepted by merchants who accept more well known card devices such as Visa or Mastercard. Still further, the user cannot make credit card purchases with the card device. Moreover, the user of the card device does not receive interest on the cash balance associated with the card device.
U.S. Pat. No. 5,544,246 to Mandelbaum discloses a smart card that allows different service providers to coexist on the smart card where the owner of the smart card may have limited access to some of the files created for or by each of the resident service providers. The Mandelbaum patent discloses that smart cards may authorize a debit or credit to an account associated with the smart card and that the smart card may carry pre-approved credit. In addition, the Mandelbaum patent discloses that the smart card has sufficient memory to permit, for example, Visa, American Express, and Mastercard to coexist on the smart card.
The smart card of the Mandelbaum system is disadvantageous because when the user charges an amount over a certain credit limit, the user has no other pool of funds from which to automatically draw and the transaction will be rejected. Further, the user receives no interest on any cash balance associated with the smart card.
U.S. Pat. No. 5,530,232 to Taylor discloses a multi-application data card which is capable of substituting for a plurality of existing single-application data cards. The multi-application data card can be a smart card comprising a memory formed with at least three memory banks or storage areas for storing and updating data relating respectively to at least one authorized holder of the card and at least two authorized applications of the card. The smart card disclosed in the Taylor patent is capable of use for credit transactions, debit transactions and non-financial transactions. A user inserts the smart card into a card reader having an input means which enables the user to select from several applications when performing a transaction.
The Taylor system is disadvantageous because when the user charges transactions over a certain limit, the user has no other pool of funds from which to automatically draw and the transaction will be rejected. Further, the smart card may not be accepted by merchants who prefer more well known credit cards such as Visa or Mastercard. Still further, the user receives no interest on the cash balance associated with the smart card, if any.
Accordingly, there is a need in the art for a multi-purpose credit card having the attributes of a standard credit card, a debit card, and an interest bearing cash account, where the credit card has a credit limit and a transaction balance (i.e., an aggregate of the authorized transactions in a given billing cycle) and the cash account has a cash balance.
With such a multi-purpose credit card, a user may employ the credit card in carrying out point-of-sale purchases and payments on the credit card may be automatically debited from the interest bearing account. The multi-purpose credit card may also be used as an automated teller machine (ATM) card such that the user may withdraw cash from the interest bearing account.
Further, there is a need in the art for a system where, when the user requests a transactional amount on the credit card which exceeds the credit limit of the credit card, a bank system authorizes the transaction based upon the aggregate of the credit limit and the cash balance less the transaction balance. Thus, a transaction may be authorized even though the credit limit associated with the credit card is exceeded. At the end of the billing cycle, funds from the interest bearing cash account are transferred to the credit card account to cover an amount due on the credit card.